Taking care of the long term

When Susan became forgetful, her sons were sure it was just normal aging. As years passed, her behavior was worrisome. When she was in her 80s, she would sometimes refuse to eat and often argued about taking medication.

A trip to her physician yielded a diagnosis of early-stage Alzheimer's. Widowed, with sons busy working on the farm and daughters-in-law with children and jobs, no one in her family could take care of her. She couldn't afford a nursing service.

You probably know someone in this situation, or you may be concerned for your own future.

"With proper planning, we can be sure our children aren't going to be burdened," says John Selky, Indiana Farm Bureau Insurance agency manager and chartered life underwriter.

Nursing home assistance is the primary coverage used for long-term care insurance. Long-term care policies also may cover home health care, assisted living, and adult day care.

Medicare will cover skilled nursing home care, but it won't pay for those other forms of long-term care.

"Long-term care insurance is insurance for your independence," says Selky, who also is certified by the Corporation for Long-Term Care (CLTC) and as a long-term care professional (LTCP).

The average nursing home stay is two and a half years. On average, individuals are admitted to nursing homes at age 83. Determine first how much you could afford to pay out of pocket. A policy should include home care, assisted living, adult day care, and hospice services.

Long-term care insurance is not inexpensive. Purchasing a plan takes proper planning and a trusted adviser. Costs (up to $2,000 per year) depend on your insurance carrier, your coverage amount, policy features, and age at the time of purchase.

You stop paying premiums when you start using the insurance. If you're doubtful that you'll get your money's worth, a return of premium rider may be available. This increases premium costs, but these will be refunded upon death.

"With long-term care insurance, each year you wait to buy coverage, the more expensive the annual premium," says Terence Holahan, assistant director of long-term care for Northwestern Mutual in Milwaukee, Wisconsin. "Part of the process is for the company to determine the state of your health. It's easier for a younger person to qualify with a lower premium."

When Susan became forgetful, her sons were sure it was just normal aging. As years passed, her behavior was worrisome. When she was in her 80s, she would sometimes refuse to eat and often argued about taking medication.

Depending on your state's requirements, your premium may be deductible on your state tax return. A tax professional can advise whether a portion of your long-term care insurance premium also is deductible on your federal tax return.